Findings from Sands & Associates’ 2024 BC Consumer Debt Study were released today, offering insights into consumer debt issues across the province. The twelfth annual study polled over 2,100 people from around British Columbia who recently made an insolvency (formal debt relief) filing, inviting individuals to share their personal insights and journey when dealing with a debt problem.

As Blair Mantin President of Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused on consumer debt help explains, the annual study series aims to highlight the causes and effects of problem debt on British Columbians:

“Consumers are waiting longer than ever before to seek help, and as leaders in BC’s debt management sector, we feel it’s one of our key responsibilities to bring these issues – and solutions – to light.

Licensed Insolvency Trustees see firsthand how deeply financial challenges impact people, in virtually every aspect of their lives – and one of the most frustrating things is that so many consumers feel they are alone and don’t know they have resources available to help them solve these issues and move forward with their lives.”

Click here to read the full 2024 BC Consumer Debt Study report.

Click here to view and download the 2024 BC Consumer Debt Study infographic.

Key Takeaways from the 2024 BC Consumer Debt Study

• 79% of British Columbians polled in the 2024 BC Consumer Debt Study said their mental health suffered because of being in debt.
• Debt-stress resulted in: constant worry about debt (reported by 84% of consumers); anxiety (78%); poor sleep (70%); alienation from family or friends (30%).
• 72% of individuals surveyed said overwhelming stress was how they knew their debts were becoming a problem.
• 41% of survey participants waited more than 2 years before seeking help with their problem debt.
• 56% of people said credit card debt was the main type of debt they had, and the top two direct main causes of debt reported by all consumers were: overextended credit due to financial mismanagement (27%) and using credit for essential costs of living income could not cover (24%).

How British Columbians Are Accumulating Debt

Consistent with past BC Consumer Debt Study statistics, the largest cohort (36%) of 2024’s study participants had between $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process, and 29% of consumers polled described their credit rating as ranging between ‘good’ to ‘excellent’ at the time of their insolvency filing.

Four of the five top-reported causes of problem debt may be connected to conditions or events outside consumers’ immediate control:

• Almost 1 in 4 people surveyed said the direct main cause of their debt was using credit for essential costs of living income could not cover (24%).
• Illness, injury or health-related problems (11%), marital or relationship breakdown (7%) and job-related issues (7%) were also direct main causes of debt identified by survey participants.
• 27% of British Columbians polled attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.

Three types of debt that Licensed Insolvency Trustees often categorize as high-risk due to the costs of borrowing and likelihood of balances becoming unmanageable were highlighted in the 2024 BC Consumer Debt Study:

• Over half of individuals polled (56%) indicated credit card debt was the main type of debt they had – 4.5 times more than the next leading type of debt.
• Payday (or instalment) loans were the second-most reported (12%) type of problem debt for consumers, as well as tax debt (12%).

Most participants in the 2024 BC Consumer Debt Study (94%) said their household has been impacted by recent inflation increases:

• The largest cohort (85%) said inflation has their household now spending more on necessities such as food and gas.
• 53% of participants said their household is now spending more on shelter and utilities, and 51% said their household is no longer able to accumulate as much savings.

How Problem Debt is Affecting British Columbians

Individuals who participated in the 2024 BC Consumer Debt Study reported a devastating range of impacts from debt, affecting virtually all aspects of everyday life:

• Over 7 in 10 people surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other top-reported signs of a debt problem that consumers identified included: Only making minimum payments (58%); seeing debt balances remain almost the same every month, despite making payments (55%).

Close to 4 in 5 people (79%) said their mental health suffered because of being in debt and 84% of individuals surveyed said they had a constant worry about debt:

• 3 in 5 of all individuals polled (60%) said their self-esteem suffered by being in debt; 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% depression because of debt stress.
• Roughly 1 in 7 people said they experienced suicidal ideation because of their debt-stress.

Nearly half (48%) of individuals polled also said being in debt caused their physical health to suffer, while close to one-third (32%) of consumers said their relationships suffered as a result of being in debt, and 29% said they had to put life events on hold being in debt.

What Consumers Did to Solve Problem Debt

Prior to seeking professional debt help from a Licensed Insolvency Trustee, consumers attempted to manage their debt with a range of actions, including many that required additional borrowing:

• Over 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
• 26% of individuals said they applied for consolidation financing, while 25% used payday or instalment loans, and 5% asked family or friends to co-sign a consolidation loan.
  • Over a third (33%) said they borrowed from family or friends to make debt payments.
• 10% of British Columbians polled said they attempted to deal with their debt by working with a credit counsellor, and 7% by working with a debt repayment agent.

Individuals who recently made a formal insolvency (debt relief) filing were surveyed for the 2024 BC Consumer Debt Study, with 85% of respondents who ultimately reorganized their debts using a Consumer Proposal, and 15% who sought debt forgiveness through Personal Bankruptcy, reflecting that debt relief for consumers has changed remarkably, with Consumer Proposals now far outpacing bankruptcies as the debt solution of choice.

Why People Are Waiting to Seek Debt Help

Only 6% of consumers polled in the 2024 BC Consumer Debt Study said they sought help as soon as they knew they had a problem, and sadly the largest portion of individuals (41%) waited for more than 2 years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.

• Most survey participants (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
• More than half of consumers polled (54% and 51% respectively) said they waited because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.

Misinformation remains a significant issue in reaching individuals to offer support and solutions:

• Over 1 in 4 BC consumers surveyed (27%) say they delayed seeking help for their debts because they didn’t know where to seek help and 15% said they delayed because they had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.
• Nearly a third of people (32%) said they waited to seek professional debt help because they thought there was no solution to their situation.

How Insolvency Has Influenced Financial Outlooks

Over 90% of the individuals polled in the 2024 BC Consumer Debt Study expressed satisfaction with their choice to file a Consumer Proposal or Personal Bankruptcy to deal with their debts, and most individuals say that their experience receiving professional debt help also improved their finances and overall financial literacy:

• Two-thirds of survey respondents (67%) said getting professional debt help allowed them to improve their budgeting and/or savings skills.
• More than half of individuals polled (55% and 53% respectively) say they are now more confident in day-to-day financial management and have a better understanding about credit and borrowing.

Click here to read the full 2024 BC Consumer Debt Study report.

Click here to view and download the 2024 BC Consumer Debt Study infographic.

View the BC Consumer Debt Study series here.

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin.

About Sands & Associates and the BC Consumer Debt Study Series

Since founding in 1990 Sands & Associates has grown to become a leader in BC’s debt help industry, now the province’s largest firm of Licensed Insolvency Trustees dedicated to debt services for consumers and small business owners. Sands & Associates’ “debt smart with heart” approach is at the core of our award-winning service, and we believe this is crucial to providing support to individuals in need.

It is our goal to promote open, honest conversations and increase awareness and support for consumers experiencing financial challenges and the BC Consumer Debt Study series offers a unique opportunity for understanding these deeply personal and often private struggles.

You are not alone in dealing with a debt problem, and you have options to clear debt and move forward with a financial fresh start. Connect with a local Sands & Associates expert today to take back control of your finances – book your free, non-judgmental debt consultation now.

The post Consumers Delay Seeking Debt Help Despite Drain on Mental Health – Latest BC Consumer Debt Study appeared first on Sands & Associates.

Having polled over 1,700 participants who recently restructured their debts using a legal debt solution, the 2023 BC Consumer Debt Study offers a unique view into consumer debt issues in the province. Blair Mantin, President of Sands & Associates, the firm of Licensed Insolvency Trustees who undertook the study, joined CTV News to discuss the study’s findings.

Watch the clips here and learn more below:

Recent BC Consumer Debt Problems – by the Numbers

• The 2023 BC Consumer Debt Study’s largest proportion of participants (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started a formal debt relief process.
• Almost 3 in 5 people (58%) said credit card debt was the main type of debt they had, nearly five times higher than the next debt type.
• Close to 1 in 8 individuals (12%) claimed payday or instalment loans was their main type of debt, and tax debt (personal income tax, GST, etc.) took the third spot at 11%.

Credit cards and payday loans can be considered interest-heavy credit, and consumers can easily develop a borrow-repay-borrow cycle that is often impossible to break with interest rapidly accumulating. 

Dos and Don’ts for Credit Cards and Managing Your Credit Card Debt – Read More

What Are Some Common Causes of Personal Debt Problems?

The common causes of debt revealed in the 2023 BC Consumer Debt Study expose the vulnerability of many consumers when it comes to their ability to financially weather personal and economic challenges. Five of the top six common causes of debt as reported by insolvent consumers relate to triggering events or circumstances that are likely beyond an individual’s clear control:

• Just over a quarter of BC consumers polled (27%) said their debt was caused by overextended credit due to general financial mismanagement.
• Closely following, the second-most reported cause of debt for 1 in 4 consumers (25%) was using credit for essential costs of living income could not cover.
• Following these, the remaining top six causes of individuals’ debt were attributed to: Illness, injury, or health-related problems (11%); Marital or relationship breakdown (7%); Job related issue (5%) and Pandemic-related job loss or reduction in work hours (5%).

95% of individuals participating in the 2023 BC Consumer Debt Study said their household has been impacted by recent inflation increases, with the largest proportion (88%) noting inflation has their household now spending more on necessities such as food and gas.

• Half (50%) also say their household is no longer able to accumulate as much savings, leaving consumers further exposed to difficulties in meeting unanticipated financial needs.

There was a bright spot in the findings; however, with over 4 in 5 people (87%) saying their insolvency filing (making a Consumer Proposal or declaring Personal Bankruptcy) has helped them manage day-to-day finances despite noticeable rising costs.

What Happens When You Can’t Pay Your Debt? Learn More

Steep Costs of Unmanageable Debt – Coping with a Debt Problem

Individuals participating in the 2023 BC Consumer Debt Study reported a range of ‘symptoms’ brought on by their unmanageable debt, including:

• 4 in 5 people (83%) said they had a constant worry about debt.
• Nearly 4 in 5 people (79%) said their mental health suffered by being in debt, and 3 in 5 (61%) said their self-esteem suffered because of being in debt. Almost half of respondents (49%) said debt caused their physical health to suffer.
• Over three-quarters of individuals surveyed (77%) said they experienced anxiety from the stress of debt; also 66% feelings of helplessness or hopelessness, and 61% depression.
• Almost 1 in 6 people (16%) said they experienced suicidal ideation because of their debt-stress.

Debt Warning Signs and Delays Seeking Debt Help

Over 7 in 10 people polled (71%) said overwhelming stress was how they knew their debts were becoming a problem – and despite this, more than 96% of survey respondents did not seek professional help right away. 

• Most respondents (64%) said they waited to seek professional debt help because I wanted to manage my debt on my own.
• Further top reasons individuals said they waited to seek professional support were: I felt ashamed I couldn’t handle the debts I had incurred (56%) and I was embarrassed to ask for help (51%).

Other top-identified signs of a debt problem reported by consumers were more transactional:

• Only making minimum payments (60%).
• Seeing debt balances remain almost the same every month, despite making payments (55%).

A lack of visibility around legal debt help resources was also a significant barrier that contributed to individuals postponing seeking professional support, with a third of survey respondents (34%) saying I thought there was no solution to my situation; more than 1 in 4 (27%) I didn’t know where to seek help and 17% I had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.

Debt Forgiveness with Personal Bankruptcy: Step-by-Step

How Did People Attempt to Solve Their Debt Problems?

Despite the significant personal impacts of their debt issues, fewer than 4% of people polled said they sought help right away from a debt help professional, and, in this time, individuals attempted a variety of different tactics to solve their debt problems.

• Many people turned to more borrowing to try to manage their debt, with over a third of survey participants (36%) saying they applied to extend credit limits on existing debts and 34% who borrowed from family or friends to make debt payments.
• More than 1 in 4 individuals (26%) applied for consolidation financing; 25% used payday or instalment loans, and 4% asked family or friends to co-sign a consolidation loan.

Participants in the 2023 BC Consumer Debt Study overwhelmingly used a Consumer Proposal to legally consolidate and cut their debt (81% of study respondents), and over 90% of all individuals surveyed said they were satisfied with their decision to eliminate their debts with an insolvency process.

More people than ever before are choosing to use a Consumer Proposal to consolidate and cut their debt, rather than file for bankruptcy. 

Learn More About Consumer Proposals

Getting Debt Help – Where Consumers Can Get Qualified Support

Blair Mantin, President of Sands & Associates, says that, unfortunately, it can be frustrating and discouraging for consumers who attempt to self-manage their debt for too long, and that overwhelmed consumers are highly vulnerable to inferior, unregulated, and even illegal services sold by debt settlement agents or debt advisors.

• Consumers are encouraged to get impartial and accurate advice from a Licensed Insolvency Trustee at the onset of a debt problem.
  • Licensed Insolvency Trustees are Canada’s only established debt help professionals and are fully regulated, qualified, and endorsed to serve Canadians with a range of debt management services and advice.
  • You do not need to be dealing with an extreme situation to seek support from a Licensed Insolvency Trustee, and consumers can get free, confidential advice at any point.
• Connect directly with a local Licensed Insolvency Trustee to better understand your situation, get accurate information, and explore all possible options in a free, confidential debt consultation.
  • No referral, payments, or third-party agents are necessary. 

Non-judgmental debt support for individuals and a full suite of debt help services is available to you. Connect with a caring local debt expert by phone, video, or in-person – book your free, confidential consultation today.

The post New BC Study Explores Personal Debt Problems in the Province appeared first on Sands & Associates.

Findings from the 2023 BC Consumer Debt Study were released today, presenting a unique exploration of consumer debt issues in the province. The eleventh annual study surveyed over 1,700 people from around the province who recently restructured their debts using a Consumer Proposal, or filed for Bankruptcy, inviting these individuals to share honest personal insights into their experiences dealing with debt, and finding solutions to these difficulties.

Conducted by Sands & Associates, the BC Consumer Debt Study series is the only study of its kind focused on BC and, according to Sands & Associates President and Licensed Insolvency Trustee Blair Mantin, the annual studies offer an opportunity to understand the realities of the financial challenges people across the province face, and the many facets of a debt problem. As Blair explains:

“As Canada’s debt help professionals, we know that when debt is unmanageable it carries impacts to a person that are far beyond account balances or credit scores. People’s mental health, relationships, physical health and more suffer seriously under this burden, and the emotional beating they take often causes them to struggle alone for months and even years.

In our current post-COVID, high inflation environment consumers are constantly facing a barrage of financial challenges and if uncontrollable debt is one of them, we know that things can deteriorate quickly. It is critical for people to have support, know where and how to access it, and have confidence in the resources available to help them resolve a debt problem and move forward with life.”

Click here to read the full 2023 BC Consumer Debt Study report

Click here to view and download the 2023 BC Consumer Debt Study infographic

Consumer Debt Issues in BC – Highlights from the 2023 BC Consumer Debt Study 

The largest proportion of participants in the 2023 BC Consumer Debt Study (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started a formal debt relief process.

• 30% of all study participants described their credit rating as ranging from ‘good’ to ‘excellent’ at the time of making a Consumer Proposal or filing Bankruptcy.
• Close to 3 in 5 people (58%) said credit card debt was the main type of debt they had, almost five times higher than the next debt type.
• Roughly 1 in 8 individuals (12%) claimed payday or instalment loans was their main type of debt, the highest proportion of this type of debt in the BC Consumer Debt Study series history.

Other trends may indicate consumers have become less able to accumulate and maintain a large debt-load, and that the access to Consumer Proposals as a debt management alternative to Bankruptcy has increased substantially:

• 2023’s study had the highest number of participants ever indicating their debt levels were below $25,000 when they started a Consumer Proposal or Bankruptcy, while the number of people who indicated having debt levels of $100,000 or more was the lowest ever.
• The proportion of Consumer Proposal filings (over Bankruptcy) in BC has increased significantly over time. As illustrated by respondents in the BC Consumer Debt Study series, Consumer Proposals as the solution of choice rose from 20% of respondents in 2012’s study, to a whopping 81% of respondents in 2023. 

Behind the Debt: Economic Issues and More

Consumers appear vulnerable to a range of personal and economic issues outside their immediate control that may create financial strain that ultimately develops into a debt problem:

• Just over a quarter of BC consumers polled (27%) said their debt was caused by overextended credit due to general financial mismanagement.
• Closely following, the second-most reported cause of debt from 25% of consumers was using credit for essential costs of living income could not cover.
  • The proportion of individuals attributing their debt to a reliance on credit for living expenses increased from 20% in 2022’s study.
• The remaining top six causes of debt identified by consumers were: Illness, injury or health-related problems (11%); Marital or relationship breakdown (7%); Job related issue (5%) and Pandemic-related job loss or reduction in work hours (5%).

95% of the 2023 BC Consumer Debt Study respondents indicate their household has been impacted by recent inflation increases, with the largest proportion (88%) saying inflation has their household now spending more on necessities such as food and gas. Half (50%) also say their household is no longer able to accumulate as much savings, leaving consumers exposed to future challenges in meeting unexpected financial needs.

Signs and Symptoms of a Debt Problem 

More than 7 in 10 people polled (71%) said overwhelming stress was how they knew their debts were becoming a problem. 

• Other top-identified signs of a debt problem as reported by consumers were: Only making minimum payments (60%); Seeing debt balances remain almost the same every month, despite making payments (55%) and Accumulating more debt on credit accounts (37%). 

Study participants disclosed a range of personal impacts to coping with unmanageable debt, including:

• A constant worry about debt was present for over 4 in 5 people (83%).
• Almost 4 in 5 people (79%) said their mental health suffered by being in debt, and 3 in 5 (61%) said their self-esteem suffered because of being in debt. Nearly half of respondents (49%) said debt caused their physical health to suffer.
• 29% of people polled said the stress of debt caused them to alienate themselves from family or friends, and 30% said their relationships suffered due to debt-stress.
• Over three-quarters of those surveyed (77%) said they experienced anxiety from the stress of debt; also 66% feelings of helplessness or hopelessness, and 61% depression.
• Almost 1 in 6 people (16%) said they experienced suicidal ideation because of their debt-stress. 

Managing a Personal Debt Problem 

Although over 90% of people polled in the 2023 BC Consumer Debt Study said they were ultimately satisfied with their decision to eliminate their debts with an insolvency process, arriving at this positive solution unfortunately often takes an extended time – over 96% of survey respondents did not seek professional help right away. 

• Most respondents (64%) said they waited to seek professional debt help because I wanted to manage my debt on my own.
• Other top reasons individuals waited to seek professional support were: I felt ashamed I couldn’t handle the debts I had incurred (56%) and I was embarrassed to ask for help (51%).
• A lack of public awareness of debt management resources also remains a significant issue, with a third of survey respondents (34%) saying I thought there was no solution to my situation; over 1 in 4 (27%) I didn’t know where to seek help and 17% I had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.

A variety of different tactics were used by BC consumers polled, as individuals attempted to solve their debt problems on their own, often turning to more borrowing as a solution:

• Over a third of survey participants (36% and 34% respectively) said they applied to extend credit limits on existing debts and/or borrowed from family or friends to make debt payments.
• A quarter of individuals (26%) applied for consolidation financing; 25% used payday or instalment loans, and 4% asked family or friends to co-sign a consolidation loan.

Outlooks and Attitudes Improved After Solving Debt Problems

In addition to positive sentiments around their choice of a Consumer Proposal or Bankruptcy to manage their debt, more than 4 in 5 participants (87%) said that filing a Consumer Proposal or declaring Personal Bankruptcy has helped them manage day-to-day finances despite noticeable rising costs.

Individuals polled additionally said their experience receiving professional debt help:

• Improved their budgeting and/or savings skills (69%).
• Has made them more confident in day-to-day financial management (59%).
• Gave them a better understanding about credit and borrowing (54%).

Debt study participants were also invited to share their retrospective advice to others, and to provide words of encouragement to others who may be facing similar struggles. We highly encourage readers to browse these personal insights shared, as highlighted within the 2023 BC Consumer Debt Study report. 

Click here to read the full 2023 BC Consumer Debt Study report

Click here to view and download the 2023 BC Consumer Debt Study infographic

2023 BC Consumer Debt Study infographic

View the BC Consumer Debt Study series here

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin.

About Sands & Associates and the BC Consumer Debt Study Series

Sands & Associates was founded in 1990 and has grown to become an award-winning leader in the debt help industry, now BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt services for consumers and small businesses.

Taking a non-judgmental “debt smart with heart” approach to helping individuals deal with a debt problem is the foundation of Sands & Associates’ beliefs, and we feel that understanding the extent of a financial crisis is a crucial step in providing the right solutions and support to people in need.

It is our goal that the BC Consumer Debt Study series will continue to highlight challenges faced by individuals across the province and encourage members of professional and government organizations to take active steps to reach consumers in need early, and with the right support to achieve better outcomes.

Supportive debt relief services and debt restructuring solutions are available for BC residents via telephone, video, and in person at local offices throughout the province. Connect with a qualified local Sands & Associates debt expert today – book your free, non-judgmental debt consultation here.

The post Increasing Number of Consumers Turning to Credit for Costs of Living, with Impacts to Mental Health and More – Latest BC Consumer Debt Study appeared first on Sands & Associates.

From strained mental health, to fractured relationships and more – the toll of debt is often much more than a financial one, and despite these overwhelming impacts of dealing with problem debt, only 5% of people polled in the 2022 BC Consumer Debt Study said they sought help right away from a debt professional.

BC Licensed Insolvency Trustee Blair Mantin, President of Sands & Associates, says “You owe it to yourself to seek debt help,” and suggests that more open conversations and access to non-judgmental support are key to removing hurdles for people who may be struggling with debt and its devastating impacts.

Does Debt Impact Mental Health? Latest BC Consumer Debt Study Says Emotional Burden Can Be Substantial

Debt Solutions and a Financial Fresh Start

Meet Pratap, Dan, and Heidi. They each have first-hand experience in dealing with – and resolving – problem debt, and in a bid to help others seek support and solutions, spoke with Global News about some of their own personal experience in dealing with debt.

Meet Pratap and learn how his financial struggles escalated during the COVID-19 pandemic:

Meet Dan and learn about his journey through recovery and managing overwhelming debt:

Meet Heidi and learn how she overcame her financial difficulties to create new habits and healthy boundaries:

The individuals surveyed in the 2022 BC Consumer Debt Study ultimately chose to manage their debts with a legal debt relief solution, either by consolidating their debt with a Consumer Proposal or by filing personal bankruptcy. Over 90% felt satisfied, if not extremely satisfied by their choice, and expressed positive outcomes from their decision to get professional debt help, including:

• Over 7 in 10 people said their experience receiving professional debt help allowed them to improve their budgeting and/or savings skills, and 57% reported being more confident in day-to-day financial management because of their experience.
• 53% of participants said they have a better understanding about credit and borrowing.
• 39% said they are more open in discussing finances and general money matters with others.

Get Debt Help Today – You Owe it to Yourself 

If you are struggling with debt, know that you are not alone, and that there are solutions to help you live your best life – without debt.

To explore your legal and informal options for dealing with debt, and get trustworthy advice, a Licensed Insolvency Trustee is the right professional to help you.

• Licensed Insolvency Trustees are Canada’s only fully regulated and endorsed debt help experts, empowered to serve Canadians with a range of debt management services.
• You do not need to be dealing with an extreme situation to seek support from a Licensed Insolvency Trustee, and BC consumers can request a free confidential consultation with Sands & Associates by phone or video, or in person from a local office.

Move forward with confidence and optimism for what the future holds. Book your free, non-judgmental debt consultation today – you owe it to yourself to get debt help.

The post Dealing with Debt – Global News Features Real Stories from BC Consumers appeared first on Sands & Associates.

Findings from the 2022 BC Consumer Debt Study were released today, offering a unique and frank view of consumer debt issues British Columbians face. Conducted by Sands & Associates, over 1,400 individuals from around the province who recently declared bankruptcy or restructured their debts using a Consumer Proposal consolidation plan participated in the study, sharing detailed personal insights into their first-hand experiences dealing with – and ultimately resolving – problem debt.

The tenth in the annual series and only study of its kind specifically focused on BC, according to Sands & Associates President and Licensed Insolvency Trustee Blair Mantin, the study series sheds much-needed light on the realities that money pressures present. As Blair explains:

“Inflation, housing, the global coronavirus pandemic – those are just a few recent widespread issues that can translate into debt for many consumers, on top of common financial pressure events such as a marital breakdown or illness. It’s not one specific group being impacted either, from those early in their careers to seniors well into retirement and everyone in between – debt often appears as a tool to lean on, then turns into a serious issue with a desperate borrow-repay-borrow cycle. Being in debt deeply affects people; we see you, we hear you.

A debt problem can escalate dramatically, and we know as debt help professionals it’s a problem that has well defined solutions. But for the individual struggling, overwhelmed, ashamed – they don’t have the benefit of these insights. And this is part of why this study series is so important. If you’re dealing with a debt problem you’re not alone, and, beyond any account balances, most of all you owe it to yourself to get help when you need it.”

Click here to read the full 2022 BC Consumer Debt Study report

Click here to view and download the 2022 BC Consumer Debt Study infographic

Consumer Debt Issues in BC – Highlights from the 2022 BC Consumer Debt Study

The 2022 BC Consumer Debt Study’s largest proportion of participants (34%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) at the time they started a formal debt relief process.

• Roughly 30% of all study participants described their credit rating at this time as ranging from ‘good’ to ‘excellent’.
• Almost 3 in 5 individuals (59%) said credit card debt was the main type of debt they had – nearly 6 times higher than the next most common type of debt.
• Payday or instalment loans were reported as the main type of debt for 11% of respondents, making this the second-most common type of debt reported by survey participants for the first time in this study’s history.
• Tax debt and line of credit debt were each cited as the main type of debt for 9% of participants.

Although credit card debt continues to dominate as the most-reported type of debt, the recent increase in payday or instalment loan use is notable: payday or instalment loans were indicated as the main type of debt held by just 5% of 2019 BC Consumer Debt Study respondents, compared with 11% in this year’s study.

Behind the Debt

Uncovering the common causes of accumulated debt reveals much about the difficulties that participants in the 2022 BC Consumer Debt Study faced, particularly as we note that 4 of 5 most reported causes of debt relate to triggering events or circumstances that would generally fall outside an individual’s explicit control:

• 1 in 5 people (20%) polled said the direct main cause of their debt was using credit for essential costs of living income could not cover, while 1 in 4 (28%) said their debt was caused by overextended credit due to general financial mismanagement.
• Following these, causes of debt were attributed to: Illness, injury or health-related problems (10%); Marital or relationship breakdown (8%); Job-related issues (6%).

Although the 2022 BC Consumer Debt Study found the lowest proportion of survey participants who, following pre-pandemic trends, connect the main cause of their debt to job issues alone, a total of 6% of respondents did identify job or business disruptions due to COVID-19 as the direct main cause of their debt. The effects of the COVID-19 pandemic warrant continued observation, as the impacts are likely to continue to be felt by consumers and businesses for years to come.

The Cost of Debt – More Than Just Financial

The emotional toll of debt was the number one sign of a debt problem as reported by consumers in the 2022 BC Consumer Debt Study:

• Almost 7 in 10 people (69%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other signs of debt trouble reported most by survey participants were: only making minimum payments, as reported by almost 6 in 10 people (58%); seeing debt balances remain almost the same every month, despite making payments (53%); accumulating more debt on credit accounts (36%).

Carrying burdensome debt came at a high cost, felt far beyond account balances by most individuals polled. Study participants detailed a range of effects from dealing with debt, including:

• Close to 4 in 5 people (79%) said their mental health suffered being in debt; 63% said their self-esteem suffered as a result, and 47% that debt affected their physical health.
• Over 4 in 5 (82%) said they felt constant worry about debt; 3 in 4 (76%) had anxiety from the stress of debt; 66% feelings of helplessness and/or hopelessness; 60% depression.
• Roughly 1 in 7 people said debt-stress resulted in them experiencing thoughts or contemplation of suicide.

Many people polled also reported effects from debt on their personal milestones and important relationships:

• 30% of survey participants said they had to put life events on hold.
• 30% said their relationships suffered and 29% said debt-stress caused them to alienate themselves from family or friends; 25% said it caused arguments with their spouse or partner about money.

Dealing With Debt

Notwithstanding the significant impacts of debt on survey respondents’ daily lives, reaching out for help was often made more difficult by emotional barriers and a damaging lack of information about options for resolving problem debt. The result is that only 5% of people suffering with a debt burden said they sought help right away from a debt professional.

In addition to wanting to manage my debt on my own (reported by 65% of study respondents) common reasons that caused participants to wait to seek professional debt help sadly included:

• Feeling ashamed I couldn’t handle the debts I had incurred (55%), embarrassed to ask for help (51%), and worried about being judged (40%).
• Over 1 in 4 people (28%) said they didn’t know where to seek help, and 15% had misinformation about how legal debt relief processes worked.

Many survey participants attempted to resolve their debt problems on their own before turning to legal resources, often looking to access more credit as a solution to deal with debt, including:

• A third of individuals polled (33%) tried applying to extend credit limits on existing debts.
• 29% borrowed from family or friends to make debt payments.
• 27% applied for consolidation financing; 6% asked family or friends to co-sign a consolidation loan.
• 23% used payday or instalment loans.

Improved Financial Outlook

The individuals surveyed in the 2022 BC Consumer Debt Study ultimately chose to manage their debts through a formal debt solution (Consumer Proposal consolidation or bankruptcy), and over 90% said they were satisfied, if not extremely satisfied by their choice.

Survey participants expressed notably positive sentiments about their decision and some of the key outcomes from their experience included:

• More than 7 in 10 people (73%) said their experience receiving professional debt help allowed them to improve their budgeting and/or savings skills, and 57% reported being more confident in day-to-day financial management as a result of their experience.
• 53% said they have a better understanding about credit and borrowing.
• 39% also say they are more open in discussing finances and general money matters with others.

Participants of the 2022 BC Consumer Debt Study were also invited to share their retrospective advice, and words of encouragement to others who may be struggling with debt – and we encourage readers to learn more through these deeply personal insights offered, as highlighted within the 2022 BC Consumer Debt Study report.

Click here to read the full 2022 BC Consumer Debt Study report

Click here to view and download the 2022 BC Consumer Debt Study infographic

2022 BC Consumer Debt Study infographic

View the BC Consumer Debt Study series here

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin

About Sands & Associates and BC Consumer Debt Studies

Since founding in 1990 Sands & Associates has grown to become an award-winning industry leader, now BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt help services for consumers and small businesses across the province.

Sands & Associates is committed to delivering empowering and non-judgmental support to British Columbians, through our media and financial literacy initiatives and one-on-one consultations. We are proud to be described as having a “Debt Smart with Heart” approach and when it comes to getting debt help, we believe you owe it to yourself. Everyone is entitled to live with dignity, without the overwhelming stress of debt.

Our debt help services are available in person at local offices throughout BC, or remotely by video and telephone conferencing. Connect with a Sands & Associates BC debt help expert today – book your free non-judgmental debt consultation now.

The post Does Debt Impact Mental Health? Latest BC Consumer Debt Study Says Emotional Burden Can Be Substantial appeared first on Sands & Associates.

The 2021 BC Consumer Debt Study was produced by Sands & Associates, the province’s biggest firm of Licensed Insolvency Trustees focused exclusively on debt help services for individuals and small businesses. President and Licensed Insolvency Trustee Blair Mantin and some of the study’s participants joined Global News to discuss the study and share firsthand experiences in dealing with a debt problem.

Watch the clips here and learn more below:

About the 2021 BC Consumer Debt Study

Sands & Associates surveyed over 1,700 people across the province, recent and current clients who used one of Canada’s two legal consumer debt solutions (filing personal bankruptcy or making a Consumer Proposal) to resolve and manage their debts.

According to Blair Mantin, it was “…important to highlight the facts of consumer debt issues in BC so we can better understand, and in turn support – members of our communities. Using credit is generally accepted as a standard financial tool in adult life but the reality is that people in very ‘normal’ situations end up in crisis with overwhelming financial burdens when their debt has gotten out of hand.”

Credit Card Debt Cited 5 Times More Than Other Types of Problem Debt

The highest proportion of people polled (32%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) at the time they started a formal debt relief process, and almost 30% of respondents described their credit rating as ranging from ‘good’ to ‘excellent’ at the time.

• Over 56% of participants said credit card debt was their main type of debt when they started legal debt relief, far outpacing other top types of debt reported – tax debt (11%) and lines of credit (10%).
• Payday / instalment loans (9%) took fourth place in top-most reported type of debt for consumers.

Risky and Riskier – Understanding Payday and Brokered Cash Loans

4 of 5 Most Reported Causes of Debt Outside an Individual’s Control

• 18% of survey respondents said their debt was caused primarily from using credit for essential costs of living income could not cover.
• Other top causes of debt were attributed to:
  • Illness, injury or health-related problems (10%)
  • Marital or relationship breakdown (8%)
  • Job related issues (8%).
• Less than a third (28%) of overall respondents viewed their debt problems as being driven by overextended credit due to general financial mismanagement.

Debt Problems a Major Burden to Mental Health & Wellbeing

Study participants widely reported that being in debt significantly affected their lives in many non-financial ways that would impact their quality of life, including:

• 77% said their mental health suffered
• 68% said their self-esteem suffered
• 53% said their physical health suffered

The individual might not only feel debt effects, but also their greater familial or social interactions as well:

• 28% of people said they alienated themselves from family or friends because of debt-stress
• 33% said their relationships suffered because of being in debt
  • 24% said they had arguments with their spouse or partner about money
  • 26% said they felt their family and/or children suffered because of being in debt
• 14% said their jobs suffered
• 39% said they had to put life events on hold

“…it just becomes a very desperate life situation.” – Meet Peter, Hear His Story

Looking into the details of the impacts of debt-stress to the individual illustrates a dire situation for many people, and most survey respondents indicated they experienced multiple burdens such as:

• Constant worry about debt was reported by over 4 in 5 people – and anxiety for more than 3 in 4.
• Roughly 1 in 6 respondents said the stress of debt resulted in them experiencing thoughts or contemplation of suicide.

Over two-thirds (68%) of respondents said overwhelming stress was how they knew their debts were becoming a problem. Of transactional indicators, almost 60% said only making minimum payments was a warning sign, and half said it was seeing debt balances remain almost the same every month despite making payments.

95% of People Delay Seeking Professional Debt Help

Despite debt’s often severe impacts, most people do not immediately seek professional help; only 5% of consumers polled said they sought professional debt help right away. The majority said they were stopped short by hurdles such as:

• Wanting to manage debt on their own (63%)
• Feeling ashamed about not being able to manage debts incurred (51%)
• Feeling embarrassed to ask for help (50%)

Instead of seeking professional guidance, most respondents indicated they opted for self-directed actions, often looking to more borrowing as well as other DIY approaches to paying off debt that Licensed Insolvency Trustees often caution against, such as:

• Applying to extend credit limits on existing debts (34%).
• Applying for consolidation financing (30%).
  • 9% asked family or friends to co-sign a consolidation loan.
• 13% said they used assets to pay down debt.

From halting life milestones to distancing loved ones, depression and even suicidal ideation, the findings from this debt study are indicators of the serious risks of problem debt without intervening solutions or support systems. Information and awareness are essential for family, friends, professionals and individual members of our BC communities.

Recognizing debt as a problem is the first step in retaking control and moving forward. Like with many other challenges, debt does have solutions – and it is our hope that these insights will help encourage open conversations and continue to arm consumers with the awareness and empowerment to tackle problem debt at the onset, or even avoid it altogether. You are not alone!

Get debt help and a plan to be debt-free – book your free, confidential non-judgmental debt consultation with a local Sands & Associates expert today.

The post What Does it Mean to Have a Debt Problem? New Study Highlights BC Consumer Debt Issues appeared first on Sands & Associates.

Complete findings from the 2021 BC Consumer Debt Study were released today, offering an invitation to explore and better understand some of the many challenges faced by British Columbians dealing with a debt problem. In addition to highlighting the causes of problem debt and their impacts to British Columbians, the latest annual BC Consumer Debt Study marked other notable trends in consumer debt habits.

Click here to read the full 2021 BC Consumer Debt Study report in PDF format

Click here to view and download the 2021 BC Consumer Debt Study infographic in PDF format

Conducted by Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused on debt services for individuals and small businesses, the 2021 BC Consumer Debt Study polled over 1,700 consumers from across the province who declared personal bankruptcy or legally consolidated debt with a Consumer Proposal and provides a unique perspective on consumer debt issues.

Highlights from the 9^th Annual BC Consumer Debt Study

You have credit card debts that total over $25,000 and have just been told you’re losing your job…

Following a marital breakdown you used credit to cover your added expenses and adjust to the increased costs of living. Now you’re only able to afford the minimum monthly payments on your credit card, and your line of credit is close to maxxed-out…

Just as you’re back to work and tackling your priority in paying off the debt you accumulated making up for lost income during a shutdown, you suddenly must choose between debt payments and helping an ill family member…

So what happens next? Is there a way out? What can you do?

These situations may be more commonplace than many are comfortable admitting, and a highlight of key findings from the 2021 BC Consumer Debt Study offers some challenge to misconceptions about debt, and insights for consumers to confront debt problems early on.

According to Sands & Associates President and Licensed Insolvency Trustee Blair Mantin, “Consumers may often be lulled into thinking their debt isn’t “too much”, not realizing how easily problem debt gets out of control, or how common life challenges can leave people facing unimaginable financial difficulties and overwhelming stress.”

• Almost 30% of survey respondents described their credit rating as ranging from ‘good’ to ‘excellent’ at the time they sought legal debt relief.
• The highest proportion of respondents (32%) said when they began their formal debt relief process they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages).
• Over 56% of the consumers polled said credit card debt was the main type of debt they had, far outpacing other most-reported types of debt – tax debt (11%) and lines of credit (10%).
• “Last resort” financing use is continuing to increase, with payday or instalment loans (9%) taking fourth place in top-most reported types of debt for insolvent consumers.
  • Roughly 6% of polled consumers in 2020’s study and 5% for 2019’s said payday loans were their main type of debt.

Top Causes of Consumer Debt

Less than a third (28%) of respondents said their debts were caused by overextended credit due to general financial mismanagement – and the other 4 of top 5 most reported main causes of debt could be considered outside an individual’s control:

• Using credit for essential costs of living income could not cover (18%)
• Illness, injury or health-related problems (10%)
• Marital or relationship breakdown (8%)
• Job related issues (unemployment, lay-off, reduction in pay, etc.) (8%)

Effects of Debt-Stress on Wellbeing

Many British Columbians end up overburdened with debt and facing multiple challenges and impacts to their quality of life as they attempt resolution. Findings from the 2021 BC Consumer Debt Study uncover the human elements and the costs of living with a debt problem.

• 77% of survey participants said their mental health suffered being in debt, 68% said their self-esteem suffered, and 53% said their physical health suffered.
• Debt effects spread with 39% saying they had to put life events on hold, and 33% that their relationships suffered because of being in debt.
• Constant worry about debt was reported by over 4 in 5 people, anxiety for more than 3 in 4 and depression for 3 in 5.
• Roughly 1 in 6 respondents said the stress of debt resulted in them experiencing thoughts or contemplation of suicide.

Warning Signs of Debt & Delaying Professional Debt Help

When survey respondents were asked how they knew their debts were becoming a problem:

• Over two-thirds (68%) said their realization was driven by feelings of overwhelming stress.
• Only making minimum payments was a key indication for almost 60% of participants, and 50% said it was seeing debt balances remain almost the same every month, despite their making payments.

Most survey participants indicated they had initially opted for a self-directed approach to debt management strategies, often turning to more borrowing as a debt solution:

• Roughly 34% said in attempting to deal with their debt they applied to extend credit limits on existing debts.
• 30% said they applied for consolidation financing.

Although severe debt impacts were experienced by the majority, only 5% of consumers polled said they sought professional debt help right away. Self-imposed hurdles stopped many people from getting help early on:

• Wanting to manage debt on their own (63%).
• Feeling ashamed about not being able to handle debts incurred (51%), being embarrassed to ask for help (50%).

Noteworthy for financial sector professionals, policymakers and consumers alike, other reasons for delaying seek professional debt help:

• 29% said they didn’t know where to seek help.
• Roughly 16% said they had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.

Post Debt Solution Outlook

The 1,700+ BC consumers polled ultimately decided to resolve their debt by Consumer Proposal consolidation or filing personal bankruptcy, and 90% expressed that they were satisfied if not extremely satisfied by the outcome of their decision. Other positive outcomes conveyed by respondents include:

• 71% saying they had improved budgeting and/or savings skills.
• More confidence in day-to-day financial management (59%), and better understanding about credit and borrowing (54%).

Of particular note is the successful encouragement of conversations around money and seeking support, with over one-third (39%) of respondents saying they were more open in discussing finances and general money matters with others following their experience receiving professional debt help.

Click here to read the full 2021 BC Consumer Debt Study report in PDF format

Click here to view and download the 2021 BC Consumer Debt Study infographic in PDF format

Sands & Associates 2021 BC Consumer Debt Study Infographic

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin.

About Sands & Associates and BC Consumer Debt Studies

Since founding in 1990 Sands & Associates has grown to become an industry leader, multi-year Consumer Choice Award Winner and BC’s largest firm of Licensed Insolvency Trustees focused on debt management aid for consumers and small businesses.

Sands & Associates aims to blend consumer empowerment and financial literacy with Canadian resources, providing an overall supportive – and effective – approach to legal debt help solutions.

View the BC Consumer Debt Study series here.

On Sands & Associates annual BC Consumer Debt Study, Sands & Associates President and Licensed Insolvency Trustee Blair Mantin notes, “Through these annual studies we’re able to gain and share invaluable insights into the challenges being faced by people in virtually every community. Being able to share in this knowledge helps others to empathize, increasing awareness that is so needed to step up and help people get the resources and solutions they need to regain their lives and move forward without the overwhelming burden of a debt problem.”

If you are struggling with debt, you are not alone. Connect with a BC debt help expert today – book your free non-judgmental debt consultation with a Sands & Associates Licensed Insolvency Trustee here.

The post Costs of Living, Credit Card Balances and the COVID-19 Pandemic – Latest BC Consumer Debt Study Shows Consumer Debt a Major Blow to Mental Health & More appeared first on Sands & Associates.

Furthermore, recognizing the point at which debt has turned from manageable payment to money problem is not always easy, and many consumers may not realize how close they are to facing financial crisis until the situation is severe.

Sands & Associates’ Senior Vice-President and Licensed Insolvency Trustee Blair Mantin joined CTV News to share some of the study’s critical findings when it comes to how debt problems can affect us, warning signs to be on the lookout for, and where consumer can seek debt help.

Watch the clips here and read more below:

Key Findings from the 2020 BC Consumer Debt Study

Over 1,800 consumers across BC who eventually made the decision to file personal bankruptcy or consolidate their debts with a Consumer Proposal were polled as part of the study, weighing in with their unique insights.

Impacts of Financial Stress

Findings of the 2020 BC Consumer Debt Study highlight the alarming realities of how debt-stress manifested for consumers prior to them ultimately seeking professional debt help:

• The stress of debt caused a range of effects, including:
  • Anger/irritability
  • Feeling helpless and/or hopeless
  • Arguments with spouse or partner about money
• Nearly 80% of study participants said their debt-stress resulted in anxiety or depression.
• Roughly 1 in 6 people said the stress of debt resulted in them experiencing thoughts of suicide.

You Are Not Alone – Connect with a Caring Non-Judgmental Debt Help Specialist Today

• Over two-thirds of participants said their self-esteem suffered because of being in debt and 65% of respondents said their health suffered.
• Nearly 70% of respondents said their relationships with family and others were negatively impacted by being in debt.
• Almost 40% said being in debt prevented them from moving forward with milestone life events such as starting a family or purchasing a home.

Read the full 2020 BC Consumer Debt Study Report and Infographic here

Debt Problem Warning Signs

Two-thirds (66%) of participants in the 2020 BC Consumer Debt Study said ‘overwhelming stress’ was how they knew their debts were becoming a problem. Other signs of a debt problem reported were:

• ‘Only making minimum payments,’ reported by almost 60% of respondents.
• ‘Accumulating more debt,’ noted by about 45% of participants.
• Around a quarter of people (27%) said they realized their debts were becoming a problem because they were using credit to make debt payments.
• 20% said being turned down for a bank consolidation loan was a clear indication that their debts had reached an unmanageable level.

It is striking to note that that the top-most reported sign of a debt problem wasn’t “transactional”, but rather could be evaluated by the toll debt was taking on the individual. The impacts of debt stress can be serious; emotionally, physically, financially – virtually all aspects of a person’s life can be impacted by a debt problem.

Money Stress and Worrying About Debt

Past studies have shown that money often becomes a daily worry for people who are struggling with their debt – the 2020 BC Consumer Debt Study aimed to identify some of the specific concerns for consumers dealing with financial strain:

Prior to finding a debt solution to address financial problems, respondents’ top worries were:

• Paying off debt, reported by over 75% of respondents.
• More than 65% of participants worried most about being able to meet their basic costs of living.
• Seeing debt balances remain almost the same every month was a top concern for about 55%.
• Not having enough money to fund retirement was reported by a third of respondents.
• Over 20% of participants worried about not being able to buy things for their children.

4 Reasons to Get Your Debt-Free Plan Today

Delays in Seeking Debt Help

Only around 5% of study respondents say they sought professional debt help right away. There were a range of reasons respondents reported as leading them to wait to seek help, with troubling findings:

• Over 70% said they were trying to manage on their own.
• 38% said thought there was no solution to their situation, and 32% didn’t know where to seek help.
• Sadly, many people were held back in seeking support they ultimately needed because they felt ashamed they couldn’t manage their debts (49%) as well as worry about being judged or being embarrassed to ask for help (46%).

Meet Some of the People Whose Lives Changed Working with Sands & Associates

After taking action by consolidating debt with a Consumer Proposal or declaring bankruptcy, consumers’ money stress appears greatly diminished, with positive changes being noted in many areas:

• Around 37% of study participants say they worry now about meeting living costs – a sharp decrease from more than two-thirds of individuals who worried about being able to meet their basic costs of living prior to resolving their indebtedness.
• After receiving professional debt help, consumers’ attention dramatically shifted to allow consideration of financial goals such as funding retirement (48%) or wanting to buy a home (30%).

Discovering the light at the end of the tunnel and getting a plan to be debt-free can be an extremely positive experience, even life-changing:

• 65% of survey respondents said their experience allowed them to improve their budgeting and/or savings skills, as well as increase their confidence in day-to-day financial management.
• More than half (53%) said they now have a better understanding about credit and borrowing.
• Almost half (49%) of survey participants said they are now more open in discussing finances with others, and 40% said they gained financial skills and/or knowledge to share with others.
• Over 70% of respondents polled said they felt extremely satisfied about their choice of a Consumer Proposal or bankruptcy to deal with their debt and would recommend the option to others.

When is Filing for Personal Bankruptcy the Best Option? Learn More Here

How to Cope with Financial Stress – Where to Get Professional Debt Advice

If you are dealing with a debt problem or helping someone else who might be struggling with debt above all know that you are not alone. Debt is a problem like many others in that it has solutions. Professional help and support are available.

In Canada there is only one professional endorsed, qualified and fully empowered by federal and provincial governments to assist consumers with debt – a Licensed Insolvency Trustee.

• You can access resources via a Licensed Insolvency Trustee confidentially to discuss your personal situation, get advice about your options and assess available solutions to deal with your debts.
• You are under no obligation to commit to any formal debt management proceeding.
• There is no cost to connect and get assistance.

When evaluating your personal financial situation, you may want to consider:

• Based on what you can afford to pay towards your debts each month, are you making true progress on paying them off? Particularly when it comes to credit card debt, minimum payments are generally not sufficient to get out of debt.
  • Do the “rule of 60” math: Divide your total non-mortgage debts by 60 – does the number look like a monthly payment you could afford to pay your debts off in 5 years?
• Are you feeling any worry, anxiety or stress about your financial situation?
• Have you considered a consolidation loan, with or without a co-signer?
• Are you thinking about using assets such as your RRSPs or home equity to make debt payments?
• Are you avoiding your account balances, or filing tax returns from fear of the balances owing?

If you are feeling anxious but still not quite ready to take that step and connect with a professional, at least try to open up and connect with someone about what you are experiencing. You are not alone.

If you believe you’re approaching a “warning sign” debt situation, be especially cautious about relying solely on a self-assessment without getting professional advice from a Licensed Insolvency Trustee.

• The laws around consumer debts and their remedies are ever-changing and many people have misunderstandings about how debts can be resolved in Canada.
  • We often hear from people who mistakenly believe they can’t get help with things like tax debt, or who are about to deplete retirement assets because they believe their creditors can get to them.
• Licensed Insolvency Trustees can help you assess your situation and evaluate all the options available to you so you can make informed decisions and take back control of your future.
  • Even if your situation does not require a formal filing such as a Consumer Proposal consolidation or even personal bankruptcy, we can assist you in gaining knowledge about resources and remedies that may offer you relief you need to get back on track.
• Confidential consultations are free and can be done online from the comfort of your home.

To learn more about debt management options available to BC residents or get advice about dealing with debt book your free confidential consultation today.

The post New BC Study Highlights Detrimental Impact of Debt Problems on Mental Health and Relationships appeared first on Sands & Associates.

Licensed Insolvency Trustees Sands & Associates released the findings of the latest annual BC Consumer Debt Study this week, highlighting the financial challenges many across the province have faced, and continue to deal with alongside the COVID-19 pandemic. Sands & Associates Senior Vice-President Blair Mantin joined CTV News Vancouver to share some of the key highlights from this new study.

Watch the clips here and read more below:

Key Findings from the 2020 BC Consumer Debt Study

The eighth annual study of its kind, the 2020 BC Consumer Debt Study polled over 1,800 consumers across BC who declared bankruptcy or consolidated debt using a Consumer Proposal.

In addition to individuals’ debt levels and demographics, the study explores causes of debt and sheds light on debt-stress impacts faced by British Columbians during personal financial crises. Additionally, this year’s study highlights the COVID-19 pandemic’s role in consumer debt issues in the province to date.

Read the full 2020 BC Consumer Debt Study Report and Infographic here

Main Causes of Debt as Reported by Consumers

The highest proportion of BC residents (34%) said they were carrying between $25,000 and $49,999 of debt (excluding vehicle loans and/or mortgages) at the time they began an insolvency proceeding.

A wide range of main causes of debt were cited by participants, with several key causes emerging, as below:

• One-fifth of survey respondents stated their debt was directly due to an overextension of credit and general financial mismanagement.
• Following this, survey respondents highlighted four other main causes of debt. Particularly note-worthy is that each of these causes could be considered outside of an individual’s general control:
  • Illness, injury or health-related problems
  • Overextension of credit due to costs of living outpacing income
  • Marital or relationship breakdown
  • Job-related / job loss

Whether due to traditionally high interest rates, the “snowball effect” of compounding interest where debts can increase rapidly and/or overall easy accessibility to credit – the BC Consumer Debt Study underscores how problematic credit card debt can become. Over half of those polled said credit card debt was the main type of debt they had – five times more than other debt types reported such as lines of credit and tax debt.

Almost 30% of respondents describe their credit rating as ranging between “good” and “excellent” at the time they started a Consumer Proposal or personal bankruptcy, defying the common misconception that individuals reaching bankruptcy or legal debt relief have very poor credit ratings.

Learn Tips for Dealing with Credit Card Debt

Impact of COVID-19 Pandemic on BC Consumers’ Debt Problems

The ongoing COVID-19 pandemic has presented major financial challenges for consumers around the globe, particularly as many were ill-prepared to withstand even a minor disruption to their regular income and/or expenses. Although far from over, the pandemic is notably consequential for indebted BC consumers, as outlined below:

• More than half (54%) of study participants who filed bankruptcy or made a Consumer Proposal since BC’s initial lockdown in March 2020 said the COVID-19 pandemic was a contributing factor to them needing to seek debt relief.
  • 58% of these consumers noted the pandemic caused a loss of income, making pre-existing debt loads unmanageable.
  • 19% said the pandemic caused them to use credit to make up for lost income.
  • 4% stated they had had no debt before the COVID-19 pandemic.

For those BC residents concerned about their ability to weather the pandemic’s long-term financial impacts, a formal insolvency filing may hold the key:

• Roughly 3 in 4 individuals who had filed a Consumer Proposal or declared bankruptcy expressed overall positive sentiments of their choice in relation to their ability to manage their finances during the pandemic.
  • Nearly 1 in 3 consumers said filing allowed them to manage their finances despite an impact to their income from the pandemic.
  • Around 10% said that being debt-free put them at an advantage to manage during the pandemic (having already completed a Consumer Proposal or bankruptcy prior to the COVID-19 pandemic).

What You Should Know About CERB Repayment Debt

BC Consumer Debt Study Findings Year-Over-Year Trends

Examining BC Consumer Debt Study findings since the study’s inception in 2012 reveals long-term shifts in insolvency filings for consumers, including:

Ageing with debt an increasing concern:

• In 2020’s study nearly 40% of individuals who filed a Consumer Proposal or personal bankruptcy were in a 55+ age group, a significant increase from the first year of the study (2012) where just 26% of individuals filing insolvency proceedings were 55 years of age or older.

Consumer Proposals in BC continue to gain popularity as a strong debt consolidation option and bankruptcy alternative:

• 65% of 2020 study respondents chose to file a Consumer Proposal, compared with 32% who chose to file a personal bankruptcy. This is a significant shift from 2012’s study where nearly 80% of respondents had chosen bankruptcy over a Consumer Proposal.

Learn About Debt Help Services in BC

Managing Financial Stress and Solving Money Problems

British Columbians continue to face alarming, severe impacts when a debt problem is unmanageable:

• Over 3 in 5 participants said “overwhelming stress” was the indicator of how they knew their debts were a problem, and ‘only making minimum payments’ was reported by 59% of respondents as the trigger for them to realize their debt situation had become untenable.
• More than 3 in 4 respondents said their debt-stress resulted in anxiety or depression.
• Roughly 1 in 6 people said the stress of debt resulted in them experiencing thoughts of suicide.

Despite the serious impacts of struggling under unmanageable debt loads, 95% of people did not seek professional debt help right away. Above all it’s important to know two things: You are not alone, and there are solutions.

Whether you are facing financial stress and a money problem because of personal hardships or you’re treading water with never-ending payments because of a slow build-up of high interest debts, you have rights and remedies under Canadian legislation that can help you deal with your debt problem and achieve a financial fresh start.

You can seek confidential advice and a full suite of online services exploring your legal debt options with a Sands & Associates Licensed Insolvency Trustee. We understand the emotional hardship of carrying debt and offer our support and services with an emphasis on non-judgmental kindness and caring. Again, know that you are not alone – we are here for you.

To learn more about debt management options accessible to BC residents or get advice about dealing with debt book your free confidential consultation today.

The post New Study Highlights BC’s Consumer Debt Problems appeared first on Sands & Associates.

The 2020 BC Consumer Debt Study conducted by Licensed Insolvency Trustee firm Sands & Associates examines causes and circumstances commonly faced by British Columbians during personal financial crises. Additionally, the latest study highlights the severe realities of being in debt and offers insights into the COVID-19 pandemic’s role in consumer debt issues in the province.

Click here to view the full 2020 BC Consumer Debt Study report in PDF format

Click here to view and download the infographic in PDF format

Sands & Associates Releases Findings from 8^th Annual BC Consumer Debt Study

If you’re a British Columbian struggling to see the end of credit card payments through ever-increasing household expenses or feeling a financial burden from the COVID-19 pandemic – you are not alone.

• Over 55% of polled BC residents who eventually consolidated debt with a Consumer Proposal or filed bankruptcy for debt relief said credit card debt was the main type of debt they were carrying – far outpacing other types of debt such as lines of credit (11%) and tax debt (10%).
• The unanticipated events of 2020 further struck consumers – the COVID-19 pandemic was a contributing factor for over half (54%) of participants who filed insolvency since BC’s major lockdown in March 2020. 58% of these consumers noted the pandemic caused a loss of income, making pre-existing debt loads unmanageable.

Other notable findings from the 2020 BC Consumer Debt Study include:

• 4 of 5 top main causes of debt reported could be considered outside an individuals’ general control: Illness, injury or health-related problems (14%); Overextension of credit due to costs of living outpacing income; Marital or relationship breakdown; Job-related / job loss (each at 11%)
  • 20% stated their debt was due to an overextension of credit and general financial mismanagement
• Problem-debt may be impacting BC renters disproportionately, with fewer than 6% of respondents describing their housing situation as “homeowner”.
• More than two-thirds (66%) of individuals worried about being able to meet their basic costs of living prior to formally resolving their indebtedness.
• Most respondents said they were working full-time (53%) when they sought debt management solutions. A further 8% said they were self-employed, and another 8% said they were working part-time.
• Despite the serious impacts of struggling under unmanageable debt loads, 95% of participants did not seek professional debt help right away.

Perhaps one of the most important questions posed in the 2020 BC Consumer Debt Study: What does it feel like to have a debt problem? Findings point to alarming realities for indebted consumers. Some critical highlights include:

• More than 3 in 4 respondents said their debt-stress resulted in anxiety or depression.
• Roughly 1 in 6 people said the stress of debt resulted in them experiencing thoughts of suicide.
• Over 3 in 5 participants claimed “overwhelming stress” was the indicator of how they knew their debts were a problem.
  • Other top-reported signs of a debt problem were: “Only making minimum payments” and “Accumulating more debt”.
• Over two-thirds of study participants said their self-esteem suffered because of being in debt, and 65% said their health suffered.
• Nearly 70% of respondents indicated that their relationships with family and others were negatively impacted by being in debt.

For those concerned about their ability to weather the pandemic’s long-term impacts, a formal insolvency filing may hold the key. Related observations from the 2020 BC Consumer Debt Study:

• Roughly 3 in 4 individuals who had filed a Consumer Proposal or declared Personal Bankruptcy expressed overall positive sentiments of their debt management solution in relation to their ability to manage their finances during the pandemic. Notably:
  • Nearly 1 in 3 consumers said filing allowed them to manage their finances despite an impact to their income from the pandemic.
  • Approximately 10% said that being debt-free put them at an advantage to manage during the pandemic (having already completed a Consumer Proposal or Personal Bankruptcy prior to the COVID-19 pandemic).

Lastly, examining past BC Consumer Debt Study findings has revealed long-term shifts in insolvency trends for consumers, including:

• At roughly 11%, 2020 had the lowest number of respondents attributing the main cause of their debts to job-related challenges in the study’s 8-year history.
• Nearly 40% of individuals who filed a Consumer Proposal or Personal Bankruptcy were in a 55+ age group, a significant increase from the first year of the study (2012) where just 26% of individuals filing insolvency proceedings were 55 years of age or older.
• Consumer Proposals in BC continue to gain popularity as a debt consolidation option and bankruptcy alternative; 65% of 2020 study respondents chose to file a Consumer Proposal, compared with 32% who chose to file a Personal Bankruptcy. This is a significant shift from the results of 2012’s study where nearly 80% of respondents had chosen Bankruptcy over a Consumer Proposal.

According to Senior Vice-President of Sands & Associates and Licensed Insolvency Trustee Blair Mantin, “The COVID-19 pandemic hit some already-vulnerable consumers like a freight train. Though payment deferrals and income replacements like CERB blunted the initial impact, it was startling to learn that the pandemic was a factor in more than half of the insolvencies filed since March 2020. Sadly, it does not take much to push people into financial crisis where they can no longer service their debts, or into situations where they feel they must choose between paying their debt or meeting basic living costs. As deferrals come to an end and government income replacements are made more restrictive, we expect to see a surge of consumers who are barely hanging on at present take the necessary step of restructuring their debts in 2021.”

“Too often people focus on numbers and not enough on the problems that cause and come along with debt. We want consumers to know that they have support, where the qualified solutions are found, and above all that there is light at the end of the tunnel.”

Explaining his firm’s decision to include a focus on participants’ personal experiences and advice to others, emphasizing emotional and psychological impacts of debt he notes:

“This study is in its eighth year, and we hear each year that people just didn’t know what their options were – or where or how to get help without fear of judgment or shame. Debt still carries a lot of shame and confusion for consumers. If a friend came to you and said they were wracked with anxiety and depression, struggling to pay off a credit card that they had used because their partner or child was sick, or they lost their job – would you react with judgment or criticism? No, of course not.

Normalizing conversation around debt and its impacts is key here. The accepted silence allows negative self-talk to overrun people, and then on top of that the confusion allows noise of the unregulated debt industry to clutter access to legitimate legal debt solutions. We must keep trying to get the word out, we need to do a lot better for British Columbians.”

“Consumers need to know what their rights and remedies are when it comes to debt – and in broader conversation what our loved ones, friends, neighbours, coworkers might be going through,” he says, “We’re extremely proud to offer a safe space where people who have faced their financial challenges can offer their own words of advice and share their personal experiences – and truly there can be a restorative effect in telling your story.”

He urges consumers: “Don’t wait until you’re experiencing constant debt-stress and anxiety about your financial situation to seek advice. I would really encourage everyone to explore their legal debt options with a Licensed Insolvency Trustee – and above all know that you are not alone.”

Click here to view the full 2020 BC Consumer Debt Study report in PDF format

Click here to view and download the infographic in PDF format

Click here to view and download the infographic in PDF format

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates Senior Vice-President Blair Mantin.

About Sands & Associates and BC Consumer Debt Studies

Sands & Associates is the province’s largest firm of Licensed Insolvency Trustees focused exclusively on debt help services for individuals and small businesses. A multi-year Consumer Choice Award winner and industry leader, Sands & Associates takes a supportive and empathetic approach to debt help services, with an emphasis on boosting consumers’ knowledge and personal empowerment.

The only BC-specific annual study of its kind, the 2020 BC Consumer Debt Study is the eighth annual study conducted by Sands & Associates, polling over 1,800 consumers around the province who declared Bankruptcy or consolidated debt using a Consumer Proposal.

View past BC Consumer Debt Studies here.

Sands & Associates’ annual BC Consumer Debt Studies aim to provide insights into the financial challenges faced by people across the province, and highlight the human elements of a debt problem, which are too often overshadowed by numbers and statistics. We continue to take aim at dismantling preconceived ideas of “who has a debt problem” and strive to destigmatize conversations about debt and financial literacy.

Get debt advice and explore your options to become debt-free today – book your free confidential debt consultation now.

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